NerdWallet: Many retirees can’t wait until 70 to collect Social Security benefits, but they could if they used this strategy

by | Feb 15, 2023 | Stock Market

This article is reprinted by permission from NerdWallet. The investing information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. Delaying the start of Social Security benefits is a powerful way for retirees to cope with inflation, survive bad investment markets and reduce the risk they’ll run short of money. The advantages of waiting are so great that financial planners often recommend their clients tap other savings, such as retirement funds, to help them delay claiming.

Employers could increase their workers’ financial security by offering a similar “bridge” strategy as part of 401(k)s and other workplace retirement plans, according to a study by the Center for Retirement Research at Boston College. The bridge strategy would tap a worker’s retirement account to pay amounts roughly equal to the foregone Social Security checks. People can create such bridges on their own, of course. If Social Security projects your benefit at age 62 will be $1,500 a month, for example, you could set up automatic monthly withdrawals of that amount from your 401(k) at retirement. But having an employer offer the option could make the process easier and encourage more people to delay, says Gal Wettstein, the center’s senior research economist and co-author of the study. Plus: Straight talk about Social SecurityThe benefits of waiting are huge Social Security benefits are incredibly valuable to retirees. Benefits are adjusted annually for inflation and, unlike retirement savings, can’t be depleted by bad markets, bad investing decisions or bad luck. People can claim Social Security retirement benefits at any time from ages 62 to 70. Starting before your full retirement age, which is currently between 66 and 67, typically means settling for a …

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